Africa-Press – South-Africa. The Minister of Trade, Industry, and Competition, Parks Tau, has extended the deadline for comments on the highly contested Draft Transformation Fund Concept Document.
The department plans to create a R100 billion transformation fund that supports black-owned businesses and Small, Medium, and Micro Enterprises (SMMEs).
Tau has extended the deadline for public comments from 7 May 2025 to 28 May 2025.
The Ministry said that the delay is due to the need to give members of the public more time to comment, given the importance of the fund, which has drawn “huge public interest”.
“It will also give time to organisations and various structures to consult their members to provide inputs, views and comments that will strengthen the concept,” the department said.
Public members can email their written comments to [email protected] or in person at the department’s campus in Sunnyside, Pretoria.
The fund has faced intense opposition as it will be funded via private sector profits.
The plan, published in March, states that the government wants to work with the private sector to establish a R100 billion aggregated fund.
The Transformation Fund will be capitalised at R20 billion per annum over a five-year period.
The concept document states that the reasons for the fund are embedded in both the Constitution and the B-BBEE Act.
“Supporting and financing majority black-owned businesses, not only fosters job-creation and economic expansion but also aligns with government policies aimed at reducing unemployment,” said the document.
“This approach plays a crucial role in addressing historical inequalities and promoting inclusive economic transformation.”
It added that the Transformation Fund seeks to be an instrument that will contribute to economic growth, accelerating equal economic participation by the historically disadvantaged.
The Fund will also be administered via a Special Purpose Vehicle (SPV). A board of directors constituted by the government and private sector will oversee its implementation.
Criticism
Krutham executive chairman Stuart Theobald
The DA, the second-largest party in the GNU, rejected the notion that the fund will empower previously disadvantaged South Africans.
The DA’s spokesperson on Trade, Industry, and Competition said that real transformation can only be achieved through economic growth and reducing companies’ regulatory burdens.
Krutham executive chairman Stuart Theobald also believes that fund is misguided and will not reach its goal.
Theobald said that the concept focuses on inputs instead of output, adding that much of how BEE is done in practice is based on how much companies spend to meet targets.
Companies carefully manage how much money they spend to get the required points on BEE scorecards.
He also noted that giving out R20 billion annually to help small and medium-sized businesses scale is challenging.
The government would have to give qualifying black businesses R55 million every day for five years, which increases to R80 million when only working days are used.
This is an administrative nightmare that is unlikely to be accomplished.
Draft-Transformation-Fund-Concept-DocumentDownload
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